T&P stands for "Temperature and Pressure" and the T&P relief valve is a safety valve found on a water heater.
The T&P pressure relief valve is most often connected to a discharge pipe. The T&P relief valve operates like the radiator cap on your car.
The purpose of this valve is to relieve excessive temperature or pressure build up inside the tank if it approaches the limits of the tank's safe design range. This valve is located on top of the tank and often is threaded directly into the tank top itself. To test the valve lift up on the handle slightly and hot water should discharge out of the overflow pipe.